Stocks slide after weak jobs report

Banks and other financial companies led a modest decline in stocks Friday after a report indicating that hiring slowed sharply in May put investors in a selling mood.

The stock market slide snapped a two-day winning streak but sent bond prices surging as investors sought safety in U.S. government-backed debt. The dollar also fell sharply against several major currencies.

The downbeat jobs data appeared to convince traders that the Federal Reserve will keep interest rates low longer than previously expected. It also stirred concerns that the economy is slowing.

“What we don’t want to see is this number as a beginning of a series of weaker data,” said Quincy Krosby, a market strategist at Prudential Financial. “That’s going to affect the market.”

The Labor Department reported that the U.S. economy added only 38,000 jobs in May, the lowest amount in five years. The unemployment rate fell to 4.7 percent from 5 percent, but mainly because about half a million unemployed people stopped looking for work.

Separate reports Friday also showed a mixed snapshot of the economy. The Institute of Supply Management said U.S. services firms grew in May at the slowest pace in more than two years, while the Commerce Department said orders to U.S. factories rose in April by the largest amount in six months.

Utilities companies, which had been down of late as investors bet on the Fed raising rates sooner, rather than later, surged Friday. The sector was the biggest gainer in the S&P 500, climbing 1.7 percent. It’s now up 15 percent this year.